SSA 1099 error affects 2.9 million Social Security recipients

On January 17, 2008, the California Society of Enrolled Agents (CSEA) revealed information about erroneous Social Security Administration (SSA) 1099 forms mailed earlier in the month. The error, which applies forms mailed to 2.9 million Social Security recipients nationwide, affects Social Security recipients with Medicare deductions (Part D).

Corrected 1099 forms should be received by January 29, 2008.

For more information, Social Security recipients should call the Enrolled Agent referral number at 1-800-424-4339.

Source: “Erroneous 1099s Affect Nearly 3 Million Taxpayers Nationwide,” YubaNet.com, January 17, 2008 (http://yubanet.com/usa/Erroneous_1099s_Affect_Nearly_3_Million_Taxpayers_Nationwide.php).

Backlog of Social Security cases attributed to lack of staff, funds

Backlog raises to 755,000 in 2007 from 311,000 in 2000

Due to an increase in the number of Social Security applicants, which has a lot to do with the baby boomers’ generation, hundreds of thousands of applicants are now waiting as long as three years to find out if they qualify. This backlog is causing many people to lose homes, declare bankruptcy or even die while waiting for approval.

The Social Security Administration (SSA), in attempts to whittle down the backlog, developed a plan to hire at least 150 new appeals judges to handle the appeals from rejected applicants. The plan, which requires an additional $100 million in funding, has been delayed until Congress and the White House can come to a decision.

“The backlog is prolonging the suffering of the most vulnerable people at the most critical time in their lives,” Rick Fleming, James Scott Farrin’s Social Security lawyer, said. “We’ve had people die, we’ve had people lose their home, we’ve had people whose spouse left them because they couldn’t stand all that it was causing – the financial wreck, bankruptcy.”

The backlog was 311,000 in 2000, but has increased to 755,000 by 2007. The increase is attributed in part to the baby boomers’ generation reaching the age to apply for social security disability, but it is also attributed to the lack of staff.

Social security disability applicants must prove they have physical or mental disabilities that prevents them from “any kind of substantial work” for at least one year, or prove their illness is expected “to result in death.”

About 2.5 million people apply for social security benefits each year, two-thirds of which are denied. Of the applicants left, 575,000 file appeals; two-thirds eventually win a reversal.

But the increasing delays in the appeals process have caused litigation and financing shortages, which prevent the hiring of new administrative judges.

One social security disability lawyer said about one client a month has died while waiting an appeals hearing. Many clients run out of money or are evicted. In the past, an applicant’s case was expedited when he/she received a foreclosure warning; now, because of the backlog, cases are only expedited after receiving an eviction notice, when it is usually too late to help.

The backlog in social security disability cases have also created an extra burden on state agencies. In New York, nearly half of the 38,000 applicants wait for an average of 21 months, and receive cash and assistance from the state in the meantime.

Source: Erik Eckholm, “Disability cases last longer as backlog rises,” New York Times, December 10, 2007 (http://www.nytimes.com/2007/12/10/us/10disability.html).

Nation’s first baby boomer files for Social Security benefits

Kathleen Casey-Kirschling will be eligible for retirement benefits in January 2008

On October 15, 2007, Kathleen Casey-Kirschling was the nation’s first baby boomer to file for her Social Security retirements online. She was born one second after midnight on January 1, 1946 and will be eligible for benefits in January 2008.

Over the next two decades, nearly 80 million Americans will become eligible for Social Security benefits, more than 10,000 per day.

To find out more about what Social Security services are available online, visit socialsecurity.gov.

Source: “Nation’s first baby boomer files for social security retirement benefits – online,” Social Security Administration Press Release, October 15, 2007.

Social Security benefits to increase by 2.3 percent in 2008

Increase corresponds with Consumer Price Index increase

On October 17, 2007, the Social Security Administration (SSA) announced that monthly Social Security and Supplemental Security Income (SSI) benefits will increase 2.3 percent in 2008, affecting 54 million Americans. The benefits increase automatically each year based on the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Nearly 50 million Social Security beneficiaries will receive the increased benefits beginning in January 2008, and increased payments to more than 7 million SSI beneficiaries will begin on December 31, 2007.

Other changes that take effect in January of each year are based on the increase in average wages, which affect the maximum earnings subject to the Social Security tax (taxable minimum). The new taxable minimum will increase from $97,500 to $102,000. Nearly 12 million of the 164 million workers who will pay Social Security taxes in 2008 will pay higher taxes as a result of the taxable minimum increase.

Social Security Disability Thresholds are also changing.

• For Non-Blind Substantial Gainful Activity (SGA), the threshold increased from $900 per month to $940 per month • For Blind Substantial Gainful Activity (SGA), the threshold increased from $1,500 per month to $1,570 per month • For the Trial Work Period (TWP), the threshold increased from $640 per month to $670 per month

To be eligible for disability benefits, an individual must be not be able to engage in substantial gainful activity (SGA). A person who is earning more than a certain monthly amount is ordinarily considered to be engaging in SGA.

For a worker retiring at full retirement age, the maximum Social Security benefit increased from $2,116 per month to $2,185 per month.

Maximum Federal Supplemental Security Income (SSI) payment amounts for individuals increased from $623 per month to $637 per month, and for couples increased from $934 per month to $956 per month.

A blind or disabled child, who is a student regularly attending school, college, or university, or a course of vocational or technical training, can receive limited earnings that do not count against his or her Supplemental Security Income (SSI) benefits. The monthly limit for SSI Student Exclusion increased from $1,510 to $1,550, and the annual limit increased from $6,100 to $6,240.

Sources: “Social Security Announces 2.3 Percent Benefit Increase for 2008,” Social Security Administration Press Release, October 17, 2007; “2008 Social Security Changes Fact Sheet,” Social Security Administration Press Release, October 17, 2007.

Estimated Average Monthly Social Security Benefits: January 2008	Before 2.3% increase	After 2.3% increase
All Retired Workers	$1,055	$1,079
Aged Couple, Both Receiving Benefits	$1,722	$1,761
Widowed Mother and Two Children	$2,192	$2,243
Aged Widow(er) Alone	$1,017	$1,041
Disabled Worker, Spouse and One or More Children	$1,652	$1,690
All Disabled Workers	$981	$1,004

New safe harbor procedures finalized

Rules upon receipt of no-match letter set to become effective September 12

On August 13, 2007, new safe harbor procedures for employers who receive a no-match letter were published in the Federal Register, and they were expected to become effective by September 12, 2007.

In 2007, the Social Security Administration (SSA) estimates it will send about 140,000 letters to employers concerning 8 million workers whose names and corresponding Social Security numbers provide to their employers do not match SSA’s records.

Advocates are predicting many workers will be fired from their jobs based on their employer’s receiving a no-match letter. These firings will include authorized workers who receive a no-match letter because of mistakes in the government’s database. They will also include unauthorized workers who are unable to correct their records.

The Department of Homeland Security (DHS) is responsible for the revisions to the procedures, and seems to be converting the no-match letter into an immigration enforcement tool. DHS is allowing Immigration and Customs Enforcement (ICE) to assume if an employer receives a no-match letter that the employer has “constructive knowledge” that an employee is unauthorized to work.

For advocates, it may be important they educate workers about the new rules on no-match letters and explain the different types of errors that can commonly result in a no-match letter. Workers have rights, including their right to be free of retaliation for exercising their rights as workers and their right to remain silent.

If a worker is notified that their employer has received a no-match letter, workers should request a copy of the letter to ensure the employer is responding to a notice from either SSA or DHS.

Workers should also be aware that employers may abuse and misuse the letters and the new rules. As such, they should document who the employer has notified of a discrepancy.

If workers have any questions about their workers’ or immigration rights, they should call the Law Offices of James Scott Farrin’s Social Security Attorney, Rick Fleming.

Mr. Fleming advises all employees to be aware that within 30 days of an employer receiving a no-match letter:

• Employers should promptly check records to ensure the “no-match” is not a typographical or clerical error. • If there is an error, employers should correct the information and verify the corrected data with the relevant agency, which is either SSA or DHS. • If the error cannot be fixed, employers should promptly request the employee to confirm their name and Social Security number in their employer’s records. • If the employee corrects the information, employers must notify the appropriate agency and verify that the information is correct with either the SSA or DHS. • If the information is correct, employers should advise the employee to contact the correct agency to fix the information.

A no-match has been resolved only when the employer verifies the information with DHS or SSA.

If an error is not fixed within 90 days of receiving a no-match letter, employers should complete a new I-9 employment eligibility form without using the documents that were the subject of the no-match letter. Employers have three additional days (or a total of 93 days) to correct this.

If an employee is unable to fix the problem in the no-match letter, the employer may choose to fire the employee or run the risk that DHS will find that the employer had knowledge of hiring an authorized worker.

But, DHS has said if employers do not obtain any knowledge about having hired an unauthorized worker, the worker may continue to work for them until all steps are completed. There is, however, nothing preventing employers from firing employees before the steps are completed.

Source: “DHS announces it has finalized ‘safe harbor procedures for employers who receive a no-match letter’ rule,” National Immigration Law Center, August 10, 2007.

Q & A about SSD loan forgiveness

Student loans may be discharged if a student becomes totally and permanently disabled. It is best to talk to a Social Security lawyer about such a possibility. The following are several questions students may have about loan discharges and total and permanent disability:

Q. I can’t pay my student loans because I’m disabled and not working. Is there anything I can do?

A. It is possible to have your student loan debt discharged, or cancelled, if you become totally and permanently disabled. This means you cannot work and earn money because of an injury or illness that is expected to continue indefinitely or to result in death.

Q. How do I know if I qualify for a loan discharge if I am totally and permanently disabled?

A. In order to apply for a loan discharge, you must be 100 percent disabled and have a physician certify this in writing.

Q. How do I apply for a loan discharge?

A. If you qualify for a loan discharge, you must apply for one of the following:

• Federal Perkins Loan borrowers must apply to the school that made the loan or to the loan servicer the school has designated. • Direct Stafford and PLUS Loan borrowers must contact the Direct Loan Servicing Center at 1-800-848-0979. • FFEL Stafford and PLUS Loan borrowers should contact the lender or the agency holding the loan.

If you are not sure what type of loan you have or who holds it, you can find out at The National Student Loan Data System for Students.

Q. What should I do while I am waiting to hear if my discharge has been accepted?

A. Until you hear back about whether your discharge has been accepted or not, you should continue making payments on your loan to prevent it from going into default or accumulating additional interest. However, If you have a FFEL or Direct Stafford Loan, you may be granted forbearance, which means no one is allowed to collect on your loan until it is either approved or denied. If you have a Federal Perkins Loan, schools must automatically defer your loans if you are performing a service that will qualify you for loan cancellation, such as teaching in a low-income school.

Q. What will happen if I qualify and if my discharge is accepted?

A. If you are determined to be totally and permanently disabled, you will have your loan placed in a conditional discharge period for three years from the date you became totally and permanently disabled. During this three-year period, you do not have to pay your loan. If you are still totally and permanently disabled by the end of this three-year period, your loan will be cancelled. If you are not still totally and permanently disabled, you must resume payment.

Q. What will happen if my loan discharge application is denied?

A. For most discharges, the holder of your loan makes the final decision on whether to accept it or not. If your discharge is denied, you are still responsible for repaying the loan.

Source: “Discharge/Cancellation,” Student Aid on the Web, June 28, 2007

Proposed regulation will speed up process for Social Security applicants

Proposed regulation will speed up process for Social Security applicants

On July 9, 2007, the Commissioner of Social Security announced a proposed regulation that would extend a quick determination process to all State disability determination services. The process, called quick disability determination (QDD), is already in operation in six New England states.

The QDD process is a predictive model that analyzes the data within an electronic claims file. The model then identifies social security claims in which there is a high potential that the claimant is disabled and where evidences of the disability can be quickly obtained.

James Scott Farrin’s Social Security Disability Attorney Rick Fleming said the proposed process will be beneficial.

“Anything that cuts down on the delays is a positive,” he said. “I do not think it will have a dramatic effect on the overall backlog at the Social Security Administration, but certainly any effort to speed things up for disabled and impoverished people is greatly needed.”

Since implementation of the QDD process, 97 percent of claims have been decided within 21 days, making the average time for a decision 11 days.

Fleming thinks the QQD process will help speed up social security disability claims.

“For the most obvious cases,” Fleming said, “Yes, it will be an expedited process.”

To read the proposed regulation, consumers can visit www.regulations.gov. For more information about Social Security disability programs, visit www.socialsecurity.gov.

Source: “Commissioner Astrue proposes to extend Social Security’s quick disability determination process to all states,” Social Security press office, July 9, 2007. (http://www.ssa.gov/pressoffice/pr/qdd-process-pr.htm).

Rick Fleming Co-Chairs NCATL CLE on Social Security Law

Rules and Regulations Overlooked By Most Specialists to be Covered

On March 30, 2007, Rick Fleming, Social Security disability lawyer with the Law Offices of James Scott Farrin, will deliver welcoming remarks to the Disability Advocacy Section Meeting of the North Carolina Academy of Trial Lawyers (NCATL) Education Foundation’s Continuing Legal Education (CLE) program. The CLE program on March 30th will focus on rules and regulations overlooked by most specialists in the practice of social security law.

Rick Fleming co-chairs the NCATL education foundation CLE program on social security with Beaufort attorney Janet M. Lyles. The meeting will be held at NCATL headquarters in Raleigh, NC. Mr. Fleming has been involved in the NCATL education foundation for several years in many different capacities.

The NCATL provides legal education services to its members in order to assist them in their mission of protecting and counseling their legal clients. Client education is helpful in Social Security Law in order to explain the often long process that Social Security Disability claims go through before they are settled. Many claims take over three years to settle.

Source: CLE Information, NCATL.org, accessed March 16, 2007.

Denials and Delays Make Social Security Disability Benefits Hard to Come By

NC agency employees not equipped to handle case nuances

Disabled persons in North Carolina have never had it easy, but recently it has become even more difficult to get a disability claim processed. Consider the current state of North Carolina social security disability claims:

• There is a backlog of over 27,000 Social Security disability cases awaiting decisions in North Carolina.
• 60 percent of initial applications in NC are denied.
• Two-thirds of NC application rejection decisions are based on the opinion that the client actually can perform work.
• However, when administrative law judges review denied NC social security disability cases on appeal, about 70 percent of them are later approved.

An indicator of the increased difficulty of gaining North Carolina Social Security benefits is the decreasing number of cases that are approved when compared to the growing number of applications. Between 1999 and 2003 the number of applications for disability benefits almost doubled while the number of awards decreased by 50,000. In 1999, 707,169 people had their applications approved for benefits, while in 2003 only 651,002 had applications approved.

According to Rick Fleming, Social Security disability attorney at the Law Offices of James Scott Farrin, the average individual benefit per month does not usually exceed $900. Why, then, is the door closing on benefits in a program that Fleming calls “a safety net, not a gravy train?”

One important reason may be due to the paring down of federal funding for the program. In 2008 both the Social Security Administration (SSA) and the state agency that makes medical disability determinations on behalf of the SSA, the Disability Determination Service (DDS) will face staffing decreases that may force to scale back employee hours. It has been suggested that the funding cut could double the national backlog of Social Security disability cases pending decision from 700,000 to 1.4 million.

Another reason it is difficult to get a disability claim approved is the apparent difference between adjudication at DDS compared to adjudication at the hearing level before a judge.

The people at DDS just are not equipped to look at nuance or even odd combinations of qualifying data, according to Fleming. One approach for a personal injury attorney working with social security disability clients is to look for multiple disability qualifications for an individual who does not clearly qualify for benefits under one disability. Such an approach may help a disabled person secure benefits that will give them the safety net promised by the Social Security insurance system in the first place.

“The kind of case that gets turned down over and over by DDS is a complex one that may require them to put together several disabilities,” Fleming explained. “For example, a person 35 years old with an IQ of 70 or less who has a torn rotator cuff and can’t work as usual without pain; this is the kind of social security disability case that could wait nearly three years for a resolution.”

Add to this the fact that the process for being denied is less rigorous than it is for being approved for benefits and the failure rate of applications begins to make more sense. The DDS process makes approval more cumbersome than denial.

“Denials are generally in and out,” says Fleming, “whereas approvals frequently require shipment to the SSA Regional commissioner’s office in Atlanta for a ‘Quality Review’ approval which, in essence, is a scrutiny of the approval decision made by DDS. This adds to the time it takes to process an approval. In simple terms, it makes it harder, or at least more daunting, to approve a claim.”

Sources: Fred Kelly, “Delays Plague Disability,” Charlotte Observer, February 14, 2007; Annual Statistical Report on the Social Security Disability Insurance Program, “Outcomes of Applications for Disability Benefits,” 2004, accessed February 27, 2007.